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Lord Davies of Oldham: My Lords, I am not sure that the European Community is responsible for the water that accumulates on the properties in Britain. What is clear within that framework is that we have

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always produced the resources to manage our water properly. We do need to consider the interests of the environment, and the principle behind that is that the polluter pays. In a very obvious sense, surface water which is not drained away becomes a potential pollutant, and that is why it has to be cleared. That is a British matter with which the British are fully able to deal.

Binyam Mohamed


3.01 pm

Asked By Baroness Williams of Crosby

The Parliamentary Under-Secretary of State, Ministry of Defence (Baroness Taylor of Bolton): My Lords, I refer the noble Baroness to the Statement made by my right honourable friend the Defence Secretary in another place, and repeated in this House, on 26 February 2009, which outlined the results of a Ministry of Defence review of the records of detentions resulting from security operations carried out by the UK Armed Forces in Iraq and Afghanistan. Beyond that, it is the long-standing policy of the Government not to comment on intelligence matters.

Baroness Williams of Crosby: My Lords, I thank the Minister for that reply and turn to its second part. I think that most of us would agree that the first duty of a democratic Parliament is to hold the Executive to account; that is the very core of what it is there for. The House will be aware that we now have allegations—I repeat, allegations—of British complicity in extraordinary rendition and torture from Morocco, Egypt, the Gambia, Guantanamo Bay, Iraq and some other places. Even more embarrassingly, we have a United Nations report on the matter which holds Britain responsible for illegal and concealing acts. In the light of such rumours, would it not be better for a country with our reputation and standing in the world to appoint an independent inquiry to go into these matters, which go far beyond the case of Binyam Mohamed, so that the air can be cleared and we can once again assume our position in the world as supporters of civil liberties and freedom?

Baroness Taylor of Bolton: My Lords, as supporters of civil liberties and freedom we all have a very significant responsibility. The noble Baroness says that our first responsibility is to keep the Executive under control and accountable. That is indeed a very important responsibility although it is perhaps not quite as important as protecting the lives and well-being of our own citizens, which have come under threat from terrorism. Although there is obviously a balance to be struck there, accountability is a very important principle that must come throughout our considerations. The noble Baroness asks whether we should have a public inquiry. I think that the Government have made it clear that

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that is not an appropriate way forward. We have the Intelligence and Security Committee which provides oversight of the intelligence agencies. It is important that the Government should keep that body well informed. As the House will know, the matter of possible criminal wrongdoing has been referred to the Attorney-General, who was here to answer questions and, I hope, to convince the House of the seriousness with which she will investigate this matter.

Lord Foulkes of Cumnock: My Lords, will my noble friend confirm that as well as the question of individual culpability which is being considered by the Attorney-General, as she rightly said, the wider questions to which the noble Baroness, Lady Williams of Crosby, referred are being looked at in great detail by the all-party Intelligence and Security Committee, which consists of Members of both Houses including the former leader of the Liberal Democrat party, Sir Menzies Campbell? Is that not the appropriate way to ensure that our intelligence and security matters are properly considered in this democracy?

Baroness Taylor of Bolton: My Lords, as a former chair of the Intelligence and Security Committee, along with a distinguished noble Lord on the other side, we can confirm the very significant work that that committee does. I have always been struck by the dedication of those who work on it. It must be one of the most hard-working committees that Members of either House serve on, and it has the disadvantage, from a parliamentary point of view, that none of that work is ever given recognition because, by its nature, it has to be done behind closed doors. It is incumbent on government Ministers to be open, honest and straightforward with that committee, as with the agencies. That is where we should look for further inquiries on this matter, and I am happy that my noble friend has taken this opportunity to point that out to the House.

Lord Avebury: My Lords, bearing in mind that the UN rapporteur on torture has been in regular contact with the Government to express his concerns about the role of British intelligence officers in the interrogation of suspects who have been tortured, have the Attorney-General, the Foreign Secretary and the Home Secretary, who refused to appear before the Human Rights Committee, given evidence to Professor Nowak, and if so will they place copies of the exchanges in the Library? If the evidence shows that the Government collaborated with foreign intelligence agencies by supplying the ingredients for the questions to be put to torture victims, would that be referred to the police for criminal investigation, or would it be treated as a breach of our obligations under the convention against torture, and would that evidence be made available to the special rapporteur as well?

Baroness Taylor of Bolton: My Lords, the noble Lord raises a series of hypothetical questions, and it is not appropriate to speculate on these points, especially when we have got the inquiry into possible criminal wrongdoings that the Attorney-General is looking at, and when we have the potential for a very senior

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committee of parliamentarians of both Houses, namely the ISC, to look into these matters further. These matters are being dealt with in the right way at present.

Lord King of Bridgwater: My Lords—

The Lord President of the Council (Baroness Royall of Blaisdon): My Lords, I beg your pardon. We are out of time.

Beverley Freemen Bill [HL]

Second Reading

3.07 pm

Moved By Lord Brabazon of Tara

Bill read a second time and referred to the Examiners.

Saving Gateway Accounts Bill

Second Reading

3.07 pm

Moved By Lord Myners

The Financial Services Secretary to the Treasury (Lord Myners): My Lords, it is a pleasure to open this debate on the Savings Gateway Accounts Bill. This Bill will create a national savings gateway scheme, giving 8 million people the chance to open accounts in which each pound that they save will be matched by 50p of government money. I am pleased to have the chance to set out the purpose of the Bill and I look forward to the contributions of noble Lords both today and at future stages. I know that the Bill will benefit from the careful and expert scrutiny that it will be given in this House.

I start by explaining the aims of the saving gateway scheme, which the Bill will introduce from 2010, and how we have reached this point, because this is a measure that has been carefully developed over a number of years. We have two objectives for the saving gateway scheme: to encourage a savings habit among working-age people on lower incomes and to promote financial inclusion.

I am sure that noble Lords on all sides of this House will agree on the importance of saving. Savings can provide people with independence during their lives, security if things go wrong and comfort in later years. They make it easier to deal with unexpected events, to plan ahead and to prepare for the future. A lack of savings, by contrast, makes it more difficult to invest in education or training. Unexpected expenses, such as an unplanned domestic expenditure or an illness, are much harder to deal with, as there is less of a buffer to fall back on.

Government incentives to save are already in place, including tax relief on pension contributions and tax-free savings accounts, or ISAs, which are now held by

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18 million adults. However, both these incentives rely on tax relief to provide the incentive to save, but that offers little benefit to people on lower incomes, who pay little or no income tax. We know that people on lower incomes also have lower levels of savings than the rest of the population. According to the most recent Family Resources Survey, 43 per cent of households with a total weekly income of less than £100 have no savings at all, a percentage that falls as incomes rise.

We therefore conclude that there is a strong case for an additional incentive for people on lower incomes to save, which is what the saving gateway scheme aims to provide by offering 50p from the Government for each pound saved. We believe that this can promote a saving habit, which will continue even after the saving gateway comes to an end. The saving gateway also aims to further financial inclusion by bringing people into contact with mainstream financial services, some of them for the first time.

We are, I am sure, all aware of the costs that financial exclusion can bring, often to the most vulnerable members of our society, whether through something as simple as paying commission to cash a cheque or through being forced to turn to doorstep lenders or even illegal loan sharks because affordable credit is not available. We are working hard to tackle financial exclusion, supported by the Financial Inclusion Fund. The saving gateway will form part of that work by encouraging people to engage with the banks, building societies and credit unions that will offer saving gateway accounts.

Again, there is a case for a particular focus on people on lower incomes. According to research by the Financial Inclusion Taskforce, whose chairman, Mr Brian Pomeroy, gave evidence to the committee on this Bill in the other place, low-income households are more than twice as likely to be unbanked as other households. Many may also be saving through unregulated products, the dangers of which were shown by the collapse of Farepak in 2006. Our objectives for the saving gateway have been welcomed by organisations that help to tackle financial exclusion, by representatives of people on lower incomes, by organisations focused on saving and by the financial services industry.

Over recent years, we have looked closely at how the saving gateway can best achieve these commendable objectives. Since we first consulted on this idea in 2001, we have conducted two pilots of the saving gateway. Between the two, more than 22,000 people took part and over £15 million was saved. Those who participated were overwhelmingly positive about the effect of the saving gateway.

We are currently conducting further evaluation of the second pilot. The initial results show that 91 per cent of participants would be very likely to open a saving gateway account again if they had the chance and that 93 per cent would recommend it to a friend. This evaluation also shows that, before the pilot started, around 40 per cent of participants were putting money into a savings account at least once a month. During the pilot, the proportion rose to around 80 per cent of participants. Unsurprisingly, that number fell slightly once the pilot ended and the incentive of a government

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contribution was removed, but even 18 months later around 60 per cent were still saving once a month and around a further 20 per cent had saved in the previous three months.

We have also learnt a number of important lessons from the pilots, which have informed the design of the national saving gateway scheme. As I said, we believe that there is a strong case for an additional incentive for people on lower incomes to save. They have fewer savings than the rest of the population, they benefit less from incentives that rely on tax relief and they are also more likely to experience financial exclusion. We believe that the saving gateway should be focused on people of working age, rather than pensioners. There are significant incentives for people to save for their retirement before they reach it, including tax reliefs to incentivise pension savings, which were worth around £30 billion in 2007-08. We will also be introducing personal accounts to promote low-cost, tax-enhanced savings for retirement.

On average, pensioners have higher levels of savings than the rest of the population. Only 17 per cent of households with more than one adult over pension age have no savings, compared to 24 per cent for all households and, as I mentioned, 43 per cent of households with incomes of up to £100 a week. The Government already provide significant support to pensioners in other ways, such as winter fuel payments, free prescriptions, free eye tests and free off-peak nationwide local bus travel for the over-60s, free TV licences for the over-75s, free central heating for pension credit recipients and free loft and cavity insulation for those aged over 70.

We are also increasing the full basic state pension to £95.25 a week from April 2009 and raising the standard minimum income guarantee in pension credit by more than indexation in April, which means that no single pensioner need live on less than £130 a week in 2009-10 and no pensioner couple on less than £198.45. These measures mean that pensioners have money to fall back on, even if they have low levels of savings. I know that my noble friend Lady Hollis has views on this subject and I very much look forward to hearing them. I doubt that I have assuaged her concerns, but hope that I may be able to do so in the course of our consideration of this Bill.

Our target group is working-age people on lower incomes. We believe that the simplest and most efficient way of reaching them is through passporting eligibility for the saving gateway from qualifying benefits and tax credits, which is what the Bill sets out. This means that people will not be required to complete a means test to prove that they are eligible for the saving gateway and they will not need to contact the Government. Instead, they can automatically be sent a notice of eligibility by HMRC, which will be operating the scheme. The qualifying benefits and tax credits are listed in Clause 3 of the Bill and have been carefully selected to target working-age people on lower incomes.

Noble Lords may be aware that there was some discussion in the other place about the fact that carer’s allowance does not feature in that list. We have listened carefully to the views expressed. As the Economic Secretary said in the other place, we are minded to extend eligibility for the saving gateway to recipients

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of carer’s allowance, in order to target claimants of working age. We hope to do this in Committee. We believe that this amendment will make an additional 300,000 carers eligible for the saving gateway.

I turn to how the accounts will work, once they have been opened with an account provider. These accounts will last for two years. Each month, savers will be able to deposit up to £25. The monthly limit will promote regular saving. For each pound saved, the Government will contribute 50p at the end of the two years. In total, this means that account holders will be able to save up to £600 in their accounts and receive up to £300 from the Government, all of which will be tax-free. How the government contribution will work is set out in Clause 8 of the Bill, which provides that the maturity payment, as it is called in the Bill, will be calculated on the basis of the highest balance that has been reached during the account. At the end of the account’s life, the saver will have the choice of what happens to the money that they have saved and the maturity payment that they have earned. There will always be a default savings account for the money to roll into if the saver does not make an active decision. The account holder will also have the choice of different saving products, or of spending some or all of the money.

As I said, the results of the pilots suggest that many people will continue to save, having established the saving habit that the saving gateway is aimed to promote. I am sure that there will be widespread support in the House for that aim and for the aim of promoting financial inclusion and I hope that there will be widespread support for the Bill. It will introduce a national saving gateway scheme that will offer 8 million people a real incentive to save, targeted on working people on lower incomes who need it most. That will help to initiate a saving habit. I commend the Bill to the House.

3.20 pm

Lord Blackwell: My Lords, before speaking on the Bill, I draw attention to my interests as listed in the Register of Members' Interests, and in particular my capacity as a director of a life assurance company.

For my part, I welcome the explanation that the Minister has given of the Bill and its objectives. We must recognise that it is something of a mouse of a Bill compared to the scale of the challenges that we face, but it is welcome nevertheless as a small but significant recognition of the importance of developing a culture and habit of saving and thrift in the UK. That is clearly important for two reasons. First, it is good for the economy; and, secondly, and perhaps more importantly, it is good for the individuals. I shall touch on those points briefly.

First, it is good for the economy because a high savings economy is more productive and wealth-creating. It is important that we are clear about that because there have been moments when the messages from the Government have appeared to be somewhat ambiguous or contradictory. We should be very clear that, at the end of the day, the output of the UK economy in the long run is determined by the size of the labour force and its productivity; it is not determined by any particular level of consumer spending or government spending. The more savings we have, the more productive the

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economy becomes and the higher is future output. A low savings economy, whether brought about because of government borrowing or consumer borrowing beyond prudent levels, in the end leads to a trade deficit and a build-up of debt that has to be paid for by future generations. So we should unequivocally be in favour of a high savings economy. The question, of course, is how to manage the transition from where we are to that point, but that is the direction in which we should all seek to travel.

Secondly, savings and thrift are important for individuals in encouraging independence and self-reliance. I accept, as has the Minister, that there are many people on low incomes, especially those targeted by the Bill, for whom paying their way week by week is a struggle. They have little if any cash put by to protect them against occasional emergencies. However, we should not imagine that just because people have low incomes, they cannot save. In part, it is an attitude of mind and an attitude of responsibility—of people living within means and taking some responsibility for their future welfare. Indeed, the pilots have demonstrated that many people on low incomes—not all, but many—can, if given incentives, find the opportunity to put some money aside to provide security for their own well-being.

I was reminded of that a few years ago when an uncle of mine died at the age of 95. Among his papers, we found a life assurance policy that had been taken out by his mother when he was born in 1901 at a rate of a penny a week to a Hampshire mutual society. His mother was the wife of a rural labourer who became a war widow during the First World War, but for 40 years a penny a week was paid to that life assurance company to ensure that when her son died there was money to pay for his funeral.

That type of attitude was not unique to her. It was part of the thinking and culture of her generation and class. I fear that in many sections of society, we have lost that sense of responsibility and thrift in the headlong rush to live on borrowing and credit—the mortgages of the future. Like the Minister, I am very much in favour of something which tries to recreate some of that culture and habit.

The question is: if this Bill can help—and some pilot results suggest that it can—what can we do to make it even more effective? Let me pick on two problems that often occur to people targeted by this Bill. One is the fear that if they save and build up reserves and then, as often happens, fall into default on some of their loans or credit-card bills and are put under a court order, their savings are immediately taken as part of the settlement. That creates a view, “Why bother saving up money which will simply be taken away every so often when I hit that problem? If I had spent it, it would not have been there to be lost”. The problem is that if they do not save, it is more likely that they will not have the cushion to protect them when the unexpected comes along and they cannot keep up their payments.

Another serious issue is that when they fall into that situation, get behind on rent and become homeless, getting back into housing requires a deposit. Many cannot, even with the amount of money envisaged in this scheme, save up enough to be able to take out the deposit to get back into housing.

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Will the Government consider a couple of modifications to this Bill? The first is to provide that savings in these gateway schemes are excluded from normal debtor claims and court settlements. In other words, will they ring-fence them, so that money put aside in these savings schemes will still be there at the end of a court settlement? It will not then be lost, but will be there to continue to provide a cushion.

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